Nearly 12 million documents revealing alleged tax avoidance, hidden wealth and money laundering by some of the richest and most powerful in the world have been exposed.
The so-called Pandora Papers, described as the largest data leak of its kind in history, are said to cover the activities of around 35 current or former world leaders, more than 300 civil servants and 100 billionaires.
According to BBC Panorama, which conducted a joint investigation with The Guardian, the revelations include details of how celebrities and wealthy people have legally started businesses to secretly buy property in the UK.
Continue reading:Businessman who stole nearly £ 1.9 million bought three luxury Spanish villas
Among them are the hidden fortunes of the likes of the King of Jordan’s £ 70 million secret real estate empire and Russian President Vladimir Putin’s secret assets in Monaco.
The huge data dump is based on leaked files from 14 financial services companies in countries such as the British Virgin Islands, Panama, Belize, Cyprus, the United Arab Emirates, Singapore and Switzerland.
That information was sifted through for months by a team of 600 international reporters organized by the Washington-based International Consortium of Investigated Journalists (ICIJ) to buy a pair of villas in France for £ 12 million.
Similarly, the Crown Estate is set to investigate the purchase of £ 67 million worth of London property by a company that, according to The Guardian, acted as the “front line” for the family of Azerbaijani President Ilham Aliyev, whose track record has long been anti-corruption fighters.
One of the 17 properties included a £ 33 million office building in Mayfair, London for the President’s 11-year-old son.
Celebrities like Claudia Schiffer, Shakira and Indian cricket legend Sachin Tendulkar have also been implicated for hidden assets, although lawyers for all three famous faces have vigorously denied any wrongdoing.
In addition, some of the Tories’ biggest funders are said to be included in the revelations, which means Boris Johnson will face awkward questions at the start of the Conservative Convention.
Indeed, in the face of the offshore data leak, the government has already faced new calls to step up Britain’s defensive measures against “dirty money”.
Chancellor Rishi Sunak said HMRC would review the leaked Pandora papers.
When asked if he ever benefited from an offshore arrangement, he told Sky News, “No, I haven’t.
“I’ve seen these things overnight too, and I always find it difficult to comment specifically on them as they have only just emerged,” added Sunak.
“And. Of course. HMRC will look through these to see if we can learn anything.”
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Meanwhile, former Prime Minister Tony Blair and his wife Cherie angrily denied any wrongdoing after the Guardian and Panorama said they saved more than £ 300,000 in stamp tax by buying a £ 6.45 million London property by doing the offshore company bought owned it.
In a statement, a spokeswoman for the couple said they should have bought the property “the normal way through reputable agents” and should not have been “drawn into a story of ‘hidden’ secrets from prime ministers, etc.”
How do offshore tax havens work?
The process of raising funds abroad usually involves starting a mailbox company.
Shell or letterbox companies look like legitimate companies but in reality they do nothing other than manage the money they contain.
The real owner is hidden while the nominal management – usually an accountant or even the office cleaner – signs documents and lets their name appear on the letterhead.
This enables the real money man or woman to hide their money.
If the company was based in London or Berlin, if the authorities were determined, they could find out who owned it.
Instead, they are typically based in offshore financial centers or tax havens such as Panama, Dubai, Monaco, Switzerland, and the Cayman Islands.
These countries have very secretive banking services and low or no taxes on financial transactions.
Are they illegal?
No – the practice is completely legal and there are many good reasons to use it, such as protecting money from criminal activity and trying to bypass currency restrictions.
However, the structures are prone to abuse by criminals and money launderers who can hide behind anonymous companies.
In addition, some would argue that making income more tax efficient is unethical.
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